The Register of Overseas Entities (ROE) came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022 (ECTE Act), which received Royal Assent on 15 March 2022.

The ROE was set up on Companies House in 2022 to provide transparency over the ultimate beneficial interests held by non-residents in UK property, who are usually called overseas landlord.

The aim is to crack down on foreign criminals and prevent money laundering by overseas residents through UK property ownership. The new register will require anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind secretive chains of shell companies, setting a global standard for transparency.

If an overseas entity wishes to own land or property in the UK, before applying to register its land or property acquisition with the Land Registry, the entity must register with Companies House in advance. The key requirement is that the people who have a beneficial interest in the entity must declare their information to Companies House. If the entity is in scope and does not register, significant sanctions are imposed.

The requirement to register at Companies House also applies to overseas entities which land or property in England or Wales was purchased on or after 1 January 1999 (or land in Scotland purchased on or after 8 December 2014).  These entities must register on or before 31 January 2023.  

After registering, the overseas entity will get a unique Overseas Entity ID to give to the land registry when it buys, sells, transfers, leases or charges UK property or land.

Penalties for not complying with the ROE filing obligations include fines of up to £2,500 per day or a prison sentence of up to five years, along with restrictions when buying, selling, transferring, leasing or charging property in the UK.

1. Reasons for Registering Overseas Entities Owning UK Land or Property
   
   Looking at London in particular, its continued rise as an international capital and desirable destination has driven a booming, high-value property market. This, when combined with an openness to international money, has created the ideal conditions for financial crime to grow.
   
   Wealthy investors often buy property through corporate entities, including those offshore. Whether deliberate or not, this can hide who the ultimate beneficial owners are.
   
   This is an issue for both commercial and residential properties. Since 2010, overseas ownership of residential property has tripled, now sitting at over 1% of all UK properties. It’s also not confined to London. In the last 10 years, foreign investment in property has spread out across the UK.  
   
   The Register of Overseas Entities (ROE) came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022 (ECTE Act).  The aim is to crack down on foreign criminals and prevent money laundering by overseas residents through UK property ownership.
   
   
2. Entities Need to Register at Companies House
   
   Under the rules set out in the ECTE Act, an overseas entity intends to acquire UK land or property will need to register in advance at Companies House before applying to register its acquisition with the Land Registry.
   
   When applying for registration, the entity needs to provide beneficial owners information for verification and filing purposes. The information will be publicly available at Companies House website.
   
   The requirement to register at Companies House also applies to overseas entities which land or property in England or Wales was purchased on or after 1 January 1999 (or land in Scotland purchased on or after 8 December 2014).  These entities must register on or before 31 January 2023.  
   
   
3. Beneficial Owner
   
   A beneficial owner is any individual or entity that has significant influence or control over the overseas entity.  It can be:
   

   (1)	an individual person;
   (2)	another legal entity, such as a company;
   (3)	a government or public authority;
   (4)	a trustee of a trust;
   (5)	a member of a firm that is not a legal person under its governing law.

   
   The beneficial owners or managing officers of the overseas companies or trusts, and non-resident individuals also applied to property held on 1 August 2022, acquired since 1 January 1999 (December 2014 for properties in Scotland), and was disposed of before August 2022.  
   
   If there are no beneficial owners, or all the beneficial owners cannot be identified, the overseas entity will need to give managing officer’s information. The managing officers can be a director, manager, or company secretary of the overseas entity.
   
   
4. Qualify as a Beneficial Owner
   
   Any beneficial owner that meets one or more of the following conditions is known as the ‘natures of control’.
   
   

   (1)	holds, directly or indirectly, more than 25% of the shares in the entity;
   (2)	holds, directly or indirectly, more than 25% of the voting rights in the entity;
   (3)	holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity;
   (4)	has the right to exercise, or actually exercises, significant influence or control over the entity.

   
   
5. Information to Submit for Registration
   
   The overseas entity needs to provide entity’s information, any registrable beneficial owners or managing officers’ details if no beneficial owners are identified.
   
   Overseas entity information to provide:
   
   

   (1)	company name;
   (2)	country it was formed in;
   (3)	registered office address and correspondence address;
   (4)	email address for sending important information, including the Overseas Entity ID;
   (5)	legal form and governing law;
   (6)	public register it appears on and its registration number (if it has one);
   (7)	If the entity has disposed of UK property or land since 28 February 2022, additional information requires: (a) the deed or title number of the land or property; (b) the date that the land or property was disposed of; (c) details of any additional beneficial owners or managing officers at the time the land or property was disposed of.
   (8)	Personal information of registrable beneficial owners or managing officers whose identity is an individual.
   (9)	Business information of registrable beneficial owners or managing officers whose identity is a legal entity.

   
   
6. Verification Check
   
   Before an overseas entity registers its beneficial owners or managing officers on the ROE, a UK- supervised ‘relevant person’ will need to verify the required information about them as set out in the ECTE Act.  
   
   These verification checks must be carried out by a UK-based agent supervised under the Money Laundering /Terrorist Financing and Transfer of Funds Regulations 2017.  Supervised agents will need to provide an agent assurance code (the equivalent of a signature) and an overseas entity verification checks statement to Companies House to confirm that the appropriate procedure is followed.
   
   
7. Land Registry Update
   
   Once an entity has been successfully added to the ROE, Companies House will issue an overseas entity identification registration number (OEID) which will then be used for Land Registry applications.  The OEID will be added to the proprietorship register on the official copies of the property held by the Land Registry.  The OEID will also need to be added to certain prescribed form documents when it buys, sells, transfers, leases or charges UK property or land.
   
   
8. Annual Update
   
   The overseas entity must file an annual update about any changes or confirm that the information Companies House holding is still correct one year after it was registered, and every year after that.  It must be filed no later than 14 days after the due date. It can also file earlier if it needs to update any information.
   
   
9. Removing an Overseas Entity
   
   An overseas entity can apply to be removed from the Register of Overseas Entities if it is not, or is no longer, a registered owner of land or property in the UK.
   
   
10. Consequence for not Registered
    
    Penalties for not complying with the ROE filing obligations include fines of up to £2,500 per day or a prison sentence of up to five years, along with restrictions when buying, selling, transferring, leasing, or charging property in the UK.